The layoffs are effective beginning Monday and represent 25% of its 70,000-strong workforce. According to a letter from CEO Bill Hornbuckle obtained by The Wall Street Journal, the affected employees could be rehired if travel demand returns. They will also retain their health benefits until the end of September.
“While the immediate future remains uncertain, I truly believe that the challenges we face today are not permanent,” Hornbuckle wrote in the letter, according to the newspaper. “The fundamentals of our industry, our company and our communities will not change. Concerts, sports and awe-inspiring entertainment remain on our horizon.”
To put it simply, Las Vegas has been crushed by the coronavirus. The number of visitors declined 61% in July from a year ago, and its convention attendance fell to zero, according to the Las Vegas Convention and Visitors Authority. Resorts have been reopening slowly since they were given the greenlight in June, but visitors don’t have a ton of options to entertain themselves with because of the lack of shows, concerts and sporting events.
MGM Resorts and its competitors also make a lot of money from conferences in Las Vegas. Those have also been put on hold because of local restrictions on large gatherings of people that would cause Covid-19 to spread.
Federal law requires companies to send furlough employees layoff notices after six months. MGM Resorts has a bulk of its business in Las Vegas, with a few other resorts and casinos across the US.
MGM Resorts didn’t immediately respond to CNN Business for comment.